Jurnal THE EFFECT OF SHORT-TERM DEBT ON ACCRUAL BASED EARNINGS MANAGEMENT AND REAL EARNINGS MANAGEMENT: EVIDENCE FROM INDONESIAN MANUFACTURING COMPANIES

Jurnal THE EFFECT OF SHORT-TERM DEBT ON ACCRUAL BASED EARNINGS MANAGEMENT AND REAL EARNINGS MANAGEMENT: EVIDENCE FROM INDONESIAN MANUFACTURING COMPANIES

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Saragih, Cinthya Gladys Putri
  

(2019)

THE EFFECT OF SHORT-TERM DEBT ON ACCRUAL BASED
EARNINGS MANAGEMENT AND REAL EARNINGS MANAGEMENT:
EVIDENCE FROM INDONESIAN MANUFACTURING COMPANIES.

    S1 thesis, UAJY.
  

  

Abstract

According to Watts and Zimmerman (1986) in Scott (2012), debt covenants
hypothesis stated that the business entity to the debt agreement
the greater the manager will make earnings management. Contract violations that
The business entity has a reputation for damage. It
was also supported by Sweeney's (1994) where the business entities were
approached default earnings management to avoid breach of contract.
High short-term debt also has an impact to increase the liquidity risk, which
implies that the credit rating of the business entity is reduced, it causes the business
entity needs faster cash to repay debt, as Johnson (2003) said in Fung and
Goodwin (2013).
The purpose of this study is
to provide empirical evidence of the effect of the short-term debt on earnings
management. This company is manufacturing on listed companies
Indonesia Stock Exchange 2012-2016.
Research shows that short-term debt has no effect on accruals
earnings management but it has a positive effect on real earnings management.

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